Dr Chris Marshall is a consultant and educator with Insight Inc. focusing on risk management and bank operations
Dr Chris Marshall is a consultant and educator with Insight Inc. focusing on risk management and bank operations

CLS & STP – The implications for FX Business Models

CLS is not a black box and many banks looking for a CLS provider are ignoring the strategic implications of their decision say Chris Marshall and Seth Cohen. They examine the upstream (pre-trade) and downstream (post-trade) implications of CLS to sho

First Published: e-Forex Magazine 10 / Marketplace / April 2003

Seth Cohen Managing Director and Global Head of Bank Marketing for FX with UBS Warburg, London"Banks already realise the benefits - on February 18th 2002, CLS Bank settled 117,292 sides with a gross value of just over USD 1 trillion, requiring only a total net funding of USD 21.6 billion - a 97.8% reduction"Continuous Linked Settlement (CLS) is a major operational milestone – probably the most important innovation in banking operations since the introduction of SWIFT messaging back in the 1970s.But many banks looking for a CLS provider are ignoring the strategic implications of their decision. They perceive CLS as just a mechanism for settling FX payments safely. However, CLS is not a black box. As we’ll demonstrate, the choice of CLS provider should lead into a much more strategic FX partnership with that provider. Therefore, it’s critical to consider the full range of front-to-back FX services that potential CLS providers can offer –...continued

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